Cost-saving strategies

Last updated: September 22, 2023

Workforce management strategies due to lack of work or funds

Economic and operational conditions which result in a lack of work or reduced funds may require organizations to determine short-term and long-term work reduction and other cost-saving strategies.

Planning

Prior to instituting any workforce reduction or cost saving strategies to address financial shortfalls, departments should develop a workforce management plan that includes the following:

Assessment of the financial impact to their department – quantify the direct or projected financial impact to the department.
Explanation of short-term and/or long-term goals to manage the financial impact – measures to shrink operations and mitigate budget impact, either in the short-term or longer-term.
Statement of impact to business – explain the nature of the financial or other constraints or circumstances that require the use of workforce reduction or salary saving measures (e.g., the cancellation of sponsored events starting on X date, closure of facilities starting on X date, etc.).
Efforts made to preserve employment – describe other cost-saving measures taken before considering workforce management strategies. If the issue is lack of work, explain whether remote and/or alternative work was offered, and if not, why not. If remote work was offered, describe why it is no longer feasible.
Options for addressing lack of funds – describe the specific measures (see below) for addressing the financial shortfall.

Process

Involve your HR consultant early in the development of all workforce management plans as furlough or layoff plans require UWHR approval prior to notifying staff or taking any employment action. Working with their HR consultant, departments should communicate their workforce management plan to all of their employees. Transparency and clarity are key to ensure that employees understand the financial reality, the department’s approach, and the potential impact it may have on them.

Short-term workforce reduction and salary saving measures

Short-term workforce reduction and salary saving measures are those that temporarily curb costs and impact employees on a short-term basis. These include:

Temporary layoff – Reduction in FTE.
Temporary layoff – Furlough.
Voluntary temporary reduction in FTE or furlough.
Restrictions on temporary and permanent salary increases (TPI, ADS, in-grades, position reviews) for professional staff.
Operationalize a hiring freeze for all staff and student positions (new, replacement and temporary).
End mobile phone allowances for staff.
Temporarily suspend comp time accruals in lieu of paying overtime and manage overtime tightly.

Longer-term workforce reduction and salary saving measures

Permanent layoff and position elimination.
Permanent layoff in the form of FTE reductions.